“The declining cost of energy storage systems has increased the value
of residential PV systems. The cost of renewable energy systems will
plummet with the continuous increase in their deployment. In the past,
the major hurdle for the adoption of renewables was their intermittency
and high cost”

The market study covers the present scenario and growth prospects of the
global residential
solar energy storage marketfor 2017-2021. The report
also lists Li-ion battery and lead-acid batteriesas the two
major technology segments, of which the Li-ion battery market accounted
for more than 48% of the market share in 2016.

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Reduction in PV and energy storage systems costs

The growing focus of countries in terms of shifting to renewable power
generation has led to millions of photovoltaics (PV) systems to be
deployed across the world, to meet the power needs. In countries where
feed-in tariffs exist, excess power is sent to the grid in exchange for
a small compensation. Energy storage systems are complementing the solar
PV systems by storing the excess power for later use, thereby increasing
renewable power penetration as well as increasing the use of cheaper and
cleaner power.

There has been a steady investment in research and development by energy
storage vendors to develop technology that can reduce the cost of the
system. Since 2010, battery cost dropped at an average of 23% per year,
which in turn, has led the storage system cost to drop at an average of
14% per year.

“The declining cost of energy storage systems has increased the value
of residential PV systems. The cost of renewable energy systems will
plummet with the continuous increase in their deployment. In the past,
the major hurdle for the adoption of renewables was their intermittency
and high cost,” says Thanikachalam Chandrasekaran, a lead analyst at
Technavio for energy
storage research.

Increasing self-consumption and availability of incentives

Feed-in tariffs are a fixed payment given by the government to a
resident or commercial building that generates electricity from
renewable power and sells it to the grid. It is a long-term government
measure to accelerate investments in renewable power. Feed-in policies
have been the most prominent form of regulatory measures taken by the
government for renewable power generation. The number of countries with
feed-in has increased from 14 countries in 2000 to 110 countries as of
2016. Countries such as the US, the UK, Germany, China, and Japan have
solar feed-in tariffs.

Energy storage systems are the next logical step to accelerate the
transition to renewable power generation and increase the savings gained
from feed-in policies. In a typical scenario, a solar PV system
generates power and the excess is sold to the grid for a lower price,
and when the PV is not meeting the power needs, power is bought from the
grid. However, adding an energy storage system leads to higher savings,
as it reduces the dependency on grid power. This is one of the driving
factors for energy storage adoption in the residential sector.

Rising energy costs

Growing population and urbanization worldwide have led to the continuous
growth in global electricity generation. As a result, utilities are
running plants at full capacity to generate more power from the existing
infrastructure. Owing to the increased power production, there is a
gradual increase in power prices. The rising energy cost has led to the
adoption of energy conservation measures such as generating their own
electricity.

“The multiyear decline in solar PV technology costs has made it
competitive with grid electricity prices. The availability of energy
storage increases PV penetration, which, in turn, increases
self-consumption and helps to reduce the rising energy bills.
Residential systems with solar power and energy storage can protect
themselves from grid power outages and achieve energy independence,” says
Thanikachalam.

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